Published On : Thu, Mar 29th, 2018

The Myth of Being the Fastest Growing Major Economy

Nagpur: Many people give the tag of “world’s fastest growing major economy” to India. The Indians are naturally very happy. I think it is more of a joke. Nevertheless let us see what it really means,

The real percentage GDP growth rates (%) of some of the countries are as:

Bangladesh — 13.438

Nepal — 7.499

Ethiopia — 8.464

India — 7.2

China — 6.8

US — 2.181

Russia — 1.796

UK — 1.656

The above statistics were compiled from the IMF World Economic Outlook Database with the vast majority of estimates corresponding to the 2017 calendar year (taken from Wikipedia).

The above figures translate into the additional GDP as under:

Country GDP- US Million $ GDP Growth Rate % Additional GDP Produced – US Mn $ = GDPxGrowth Rate Remarks
Bangladesh 250,023 13.438 33,595
Nepal 24,065 7.499 1,804.63
Ethiopia 79,736 8.464 6,748.85
India 2,439,008 7.2 175,608
China 11,937,562 6.8 811,754.21
US 19,362,129 2.181 422,288.03
Russia 1,469,341 1.796 26,389.36
UK 2,565,051 1.656 42,477.24

The GDP shown above is as per IMF estimates for 2017 (taken from Wikipedia).

For the last few years we have started comparing ourselves with China in most matters, which we used to do with Pakistan earlier.

Thus in 2017 our GDP growth rate was 7.2 where as that of China was 6.8. We became jubilant thinking that we have surpassed China in economy. In reality, as seen in the above table we had produced additional goods and services worth $175,608 million where as China $811,754.21 million. We can roughly say that the population of India was equal to that of China in 2017, approximately (1.3) billion. So the additional per capita GDP also remains in the same proportion. By the way the US produced additional goods and services worth only $422,288. Compare this with the Chinese figures. As the GDP increases it becomes that much difficult to keep up the GDP growth rate. The country’s wellbeing and development is guided by what additional GDP produced in a year or wealth created and not by just GDP growth rate.

—Y Udaya Chandar